If you ever wanted to get an idea how life could be if there were more pragmatic regulations, a simple tax regime, and a wide range of options to access capital, you should visit the Isle of Man. It offers a unique combination of possibilities to entrepreneurs, investors, retirees, and anyone else who tries to live a life less complicated and more lucrative.
Over the past decade the island has successfully repositioned itself as an International Business Centre. Global tax transparency, driven by an international alliance led by the OECD, has changed the face of global finance, so the countries that will thrive in this new world are those that can offer an efficient and stable operating environment.
Dealing with changing times is something with which the Isle of Man Government has a long pedigree. Rather uniquely within northern Europe, it always kept the fiscal flexibility to deal with changing circumstances.
With over 30 years of uninterrupted economic growth, the Island avoided taking on long-term debt and instead built up total reserves to a current value of GBP 1.6billion (source: Isle of Man Government Budget 2017/2018). The overall amount seems small compared to the sovereign wealth funds of countries like Qatar, Singapore or Norway. However, since the Island only has 84,000 inhabitants, it’s equivalent to a reserve of GBP 19,000 per person (compared to the UK’s national debt of GBP 25,000 per person). Additionally, the Isle of Man Government is obliged to budget for a surplus annually.
The changes to international tax reporting were without doubt a huge challenge to the Island, and continue to be although the Island’s financial services industry has risen to the challenge. Banks, fund managers, trust companies and similar service providers are managing the bureaucracy caused by new compliance and reporting regimes.
This is where the Government’s strong fiscal position becomes relevant. The Isle of Man’s Department of Economic Development (“DED”) has been tasked with attracting new companies, new clients for services, new residents, new investors, and new employees to the Island. The DED has been investing into improving the infrastructure for business including offering attractive incentives to those who bring in new businesses to the Island.
Financial support to pay for the moving costs of your company? You got it, up to 40 percent of your first year costs.
An attractive tax regime where personal income tax liability is currently capped at £125,000 per year? This is just one of the many advantageous features of the Isle of Man tax code. (Others include the fact that there is no capital gains tax, no inheritance tax, mostly no corporation tax.)
The Isle of Man may not be able to compete with the sunshine and glamour of Monaco, nor does it have the abundance of flight connections that Switzerland can offer. But for those more inclined towards a more British environment, it currently offers possibilities that have started to be noticed further afield. On my recent trip, I was surprised to discover there is a thriving community of expats from Norway and South Africa. As well as finding the Isle of Man to be reassuringly similar to their home countries in a variety of aspects relating to business culture, residents from these countries may also simply have recognised a good bargain.
There are no restrictions on buying property in the Isle of Man and there are a wide range of high-end properties currently available which means that anyone who can offer a cash purchase is in a strong bargaining position.
In practice, anyone interested in the possibilities offered by the Isle of Man is well-advised to take a trip to the Island. The DED keeps a plethora of useful brochures available online and there are numerous financial services providers that are used to working remotely with their clients. However, having recently done my own stint of mystery shopping among service providers on the island, the old rule still rings true: nothing beats physically going to a place and actually speaking to the local decision-makers.
The possibilities for investment for businesses are plentiful, with the Financial Assistance Scheme providing advice and financial support and a new £50m Enterprise Development Scheme offering loan and equity investment to new, growing and relocating firms.
What’s more, the Island is quite simply charming. Whereas other comparable jurisdictions struggle with cramped conditions, the Isle of Man offers rolling hills and a rough but beautiful sea surrounding it all. There are also a few surprises on offer, such as the 100+ Australian wallabies that live in rural parts of the north of the Island, the descendants of some escapee wallabies from the local wildlife park. And in the summer, you can go kayaking or snorkeling with basking sharks.
For more information visit www.whereyoucan.com
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